PLEASE NOTE: Publication for public comment is not, and shall not, be construed as a recommendation or approval by the Board of Trustees of the materials published.

SUBJECT:

Amendments to Rule 2.16 of the State Bar Rules, regarding Fee Waivers

BACKGROUND:

Business and Professions Code section 6141.1, subdivision (a), is a permissive fee waiver provision, which says: “The payment by any member of the annual membership fee, any portion therefore, or any penalty thereon, may be waived by the board as it may provide by rule. The board may require submission of recent federal and state income tax returns and other proof of financial condition as to those members seeking waiver of all or a portion of their fee or penalties on the ground of financial hardship.”

State Bar Rule 2.16 is the Board’s rule for discretionary waiver of membership fees. Subdivision (C) of Rule 2.16 permits the Secretary of the State Bar to waive up to $1,000.00 in annual membership fees and related penalties for the year in which they are due, provided certain criteria are met.
This item presents the proposed changes to Rule 2.16(C) that would provide for a 50% waiver of membership fees for attorneys whose total gross annual household income is less than $20,000 per year.

DISCUSSION/PROPOSAL:

Before it was eliminated in July 2011, Rule 2.16 included a hardship waiver for attorneys whose gross annual income from all sources was $20,000 or less.

The proposal presented in this item would establish a waiver for members whose total gross annual household income from all sources is $20,000 or less, and would set the amount of the waiver at 50%. This proposed waiver clarifies that total gross household income is the threshold for determining eligibility (in place of the previous wording of total annual income from all sources). In addition, this fee waiver would allow a 50% reduction in the annual fee in place of the previous waiver of 100% of the annual fee. The 50% reduction in the annual fee is proportional to the existing low income scaling criteria of 25% fee reduction for members whose total gross annual individual income from all sources is $40,000 or less.

ANY KNOWN FISCAL/PERSONNEL IMPACT:

Based on the historical revenue loss associated with this waiver category, approval of this new low income waiver of 50% of the annual fee could reasonably be estimated at $200,000 per year.